Challenges from Google

Ballmer was also asked about the challenges that Microsoft
faces from Google. The two companies have been clashing in recent months when
it comes to search and consumer advertising, but Gartner analysts believe
Microsoft and Google are on a collision course about the future of the cloud.
When asked about people adopting the free Google Apps,
Ballmer bristled at the comparison between Microsoft's Office suite and what
Google offers.

"Let's look at facts," said Ballmer, his voice rising. "Nobody
uses those things, and the usage data hasn't grown in seven months. If you look
at the ComScore, it's just like this: It's just a flat line. You can't even put
a footnote in a document."

Ballmer also defended Microsoft's proposed acquisition of
Yahoo earlier this year. While Ballmer said there are no current offers on the
table, he still believes the offer made sense to both Yahoo and Microsoft. He added
that Yahoo and Microsoft have talked about partnering on search.
"It's clear that Yahoo did not want to sell the company,"
said Ballmer. "I think what we learned through that is that they want to remain
independent, and perhaps there will still be some opportunities to partner
around search. We are not in any discussions now, but it's an offer we made
after the acquisition had fallen through. I still think it would make sense
economically for their shareholders and ours."